Bone Morphogenetic Proteins (BMPs) are secreted ligands that play important roles in development and tissue homeostasis. As such, mechanisms exist to fine-tune and regulate their signaling. Secreted extracellular antagonists function to bin BMP ligands and neutralize BMP signaling. This proposal will focus on the DAN (Differential screening-selected gene Aberrative in Neuroblastoma) family of extracellular antagonists. The DAN family consists of seven members, which can display different potencies for BMP antagonism. For example, Gremlin-2 is a potent antagonist, whereas NBL1 is significantly less potent. Unfortunately, aberrant upregulation of DAN family members is linked to the progression of several human diseases, including chronic kidney diseases (CKD), pulmonary fibrosis and pulmonary arterial hypertension. Thus, DAN family members are currently being targeted therapeutically. Furthermore, recent evidence has also pointed to divergent roles in the differentiation of embryonic stem (ES) cells. Interestingly, while Gremlin-2 promotes ES cell differentiation to atrial cardiomyocytes, NBL1 supports a neural phenotype. In spite of this, knowledge of how DAN family members sequester BMP ligands and an understanding of their structural differences is lacking, in large part due to the absence of structural insight into thei interactions. Our objective in this proposal is to resolve the molecular intricacies of DAN:BMP interactions. To achieve our objective we will pursue the following three specific aims: (1) Determine the molecular interactions of Gremlin-2, potent DAN family antagonist with BMP, (2) Structurally characterize NBL1, a divergent DAN family member, alone and in complex with BMP, and determine the basis for differences in BMP antagonism and (3) Describe at the molecular level how Gremlin-2 and NBL1 promote different ES cell lineages. From these studies we expect to derive a deeper understanding of DAN:BMP interactions which will support the development of therapeutics that target DAN antagonist. We also expect that these results will reveal insight into the mechanisms that guide ES cells differentiation. Our studies will have a profound overall impact on the field of BMP signaling, as they will greatly expand our understanding of how BMP ligands are antagonized by members of the DAN family.